CFTC Extends Relief to Passive Crypto-Trading Software Providers

The Commodity Futures Trading Commission (CFTC) has extended no-action relief to providers of passive crypto-trading software, allowing them to avoid registering as brokers. This decision comes two days after the US Senate blocked the CLARITY Act, which aimed to clarify how broker registration applies to software developers.

The CFTC's Market Participants Division signed a staff letter (26-25) outlining the conditions under which software providers can receive relief. To qualify, providers must passively connect users to regulated markets, without taking custody of user funds or deciding how orders are routed or executed.

The relief is conditional on ten specific activities and their limits, including disclosure of conflicts and fees, written agreements with registered partners, and notification of insolvency. However, the CFTC's position on this matter may not necessarily reflect the views of other offices or divisions within the Commission, and can be modified or suspended at any time.